29% of Americans Worry About Their Debt. Here's How to Pay Yours Off Sooner
Loaded with debt? Here's your exit plan.
- A new survey reveals that debt is a big concern among consumers.
- Consolidating your balances and boosting your income could help you shed your debt sooner.
It's not uncommon to end up in a scenario where you've racked up some less than healthy debt. Maybe you got hit with a string of costly medical bills your paycheck couldn't handle, and you had to put them on your credit cards and pay them off over time. Or maybe there was a lot of pressure to spend money on the holidays, and falling back on credit cards was your only choice.
If you're stressed about your debt situation, you aren't alone. A good 29% of Americans are worried about the debt they've racked up, according to a new survey by Lincoln Financial Group. The good news, though, is that a few strategic moves on your part could help you shed that debt sooner.
1. Get on a strict budget
Following a budget should make it easier to track your spending and find ways to cut back on it. And that could, in turn, free up money to pay down some of your debt.
Comb through your bank and credit card statements from the past 12 months to see what your average monthly bills look like. Don't forget to account for bills you might pay quarterly or annually, like property taxes or insurance premiums. Then, compare your spending to your income and see if there's room to cut back so you can eke more money out of each paycheck for debt payoff purposes.
2. Boost your income with a second job
Side hustles are all the rage these days for good reason. They can be flexible, there are many to choose from, and they're an effective way to earn more money. Boosting your income could leave you with a decent chunk of cash for debt payoff purposes.
3. Consolidate your debt
Consolidating the debt you have can make it easier to keep track of and pay off. But just as importantly, if not more so, it can also make your debt less expensive from an interest rate standpoint.
If you're carrying different credit card balances, you can look at doing a balance transfer. This allows you to move your debts over to a single card with a lower interest rate. You may even qualify for a balance transfer with a 0% introductory APR, which would buy you some interest-free months to chip away at that total.
Another option is to consolidate your debt with a personal loan. Chances are, that loan will come with a lower interest rate than what you're being charged on your various credit cards.
Landing in debt is something that can happen from time to time, even if you do your best to spend judiciously. While it's understandable that your debt pile may be a source of worry, try not to beat yourself up over it. Instead, come up with a plan to eliminate it as quickly as possible. If you get yourself on a budget, give your earnings a boost with a side hustle, and find a way to make your debt less expensive, you may end up ridding yourself of it sooner than expected.
Alert: highest cash back card we've seen now has 0% intro APR until 2024
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.